Corporate directors today face a growing list of oversight responsibilities—from meeting regulatory requirements to providing strategic insights, leadership, and direction to executive teams.
At the upcoming NACD Directorship 100 Forum, corporate directors have a unique opportunity to not only engage with peers, but also to gain fresh perspectives from experts in the boardroom. Held on Tuesday, Nov. 27, 2012, in New York City, this event packs a punch—providing numerous leading sessions in just one day.
Tenet HealthCare Chairman and retired Global Chairman and CEO of Deloitte, Ed Kangas, said the NACD Directorship 100 Forum is “the best value in boardroom education.” For directors looking to stay ahead of the curve, Kangas recommends making “it a priority to attend. The selection of speakers and topics are top shelf.”
This event couples exclusive director education and networking sessions with recognition of leading corporate directors during a gala dinner.
Forum speakers include: Ann Fudge, director, General Electric; Ellen Kullman, chairman and CEO, E.I. du Pont de Nemours and Company; James Robinson III, director, Coca-Cola; Robert Denham, lead director, Chevron; and David Walker, former U.S. Comptroller General, Governance Accountability Office. Click here to view the full agenda and speakers.
Michael Pocalyko, chairman, TherimuneX Pharmaceuticals and managing director and CEO, Monticello Capital LLC, views the NACD Directorship 100 Forum as a “must-attend event for boardroom leaders who are committed to the directorship profession.” According to Pocalyko, the forum has something for directors of all levels of experience: “From the highly interactive knowledge exchange roundtables, to the timely and relevant panel discussions, even the most experienced directors will walk away with fresh approaches to boardroom leadership.”
Closely following an important presidential election, the forum topic of “Reinvigorating America” is as timely and important as ever. Although seating at this year’s NACD Directorship 100 Forum is limited, there’s still time for you to join us and the “who’s who” of the governance community on Nov. 27, 2012, in New York City.
Register here for an unparalleled opportunity to learn, network, and discuss key issues confronting your board.
On the list of director responsibilities, there are several that come to mind: monitor CEO succession, oversight of long-term strategic planning, and establish and review executive compensation packages. What does not usually make the short list but has received significant attention lately is being a skeptic. Particularly in the oversight of financial reporting, directors have a critical responsibility to assess audit evidence with a questioning mind.
In the last two weeks, NACD has announced several resources to assist directors, especially those serving the audit committee, on enhancing independence, objectivity and skepticism in overseeing the external auditor. This week, the third episode in our webinar series on skepticism—produced with the Anti-Fraud Coalition of NACD, the CAQ, The IIA, and FEI—was released, titled “Skepticism and the External Auditor.” In this episode, moderator Michele Hooper is joined by Cindy Fornelli, executive director of the CAQ, and Greg Weaver, chairman and CEO of Deloitte and Touche LLP, to discuss leading practices in exercising professional judgment.
Last Thursday, NACD President and CEO Ken Daly attended the PCAOB’s third public meeting on auditor independence and audit firm rotation. At the request of Chairman Jim Doty, Daly voiced the views of the director community with respect to mandatory audit firm rotation. In his remarks, which are available on NACD’s website, he agreed with the PCAOB’s goal for increased auditor independence, objectivity, and skepticism.
However, Daly noted that mandatory audit firm rotation is not an effective way to achieve this goal. Instead, a rigorous evaluation process, used in conjunction with the PCAOB’s recently released Auditing Standard No. 16: Communications With Audit Committees can provide a more effective solution. To this end, an evaluation tool was produced by a collaboration of organizations dedicated to strengthening audit committee performance and transparency. The Audit Committee Evaluation of the External Auditor contains sample questions to gauge the quality of services provided, communications, and interaction. It can also be scaled for use at a wide range of organizations.
Oct. 19, 1987—aka Black Friday—was noted for an historic 500+-point market plunge. But that day was not all bad. That evening, before a small crowd of staunch supporters impervious to market panic (including yours truly), the Hon. Juanita Kreps, past secretary of commerce, received recognition as the Director of the Year by the National Association of Corporate Directors (NACD)—the first award of its kind.
If the crash that resounded 25 years ago showed the fragility of capitalism, NACD’s recognition of Kreps showed its strength. One was all about alchemy; the other all about chemistry. Let me explain:
In his classic book the Alchemy of Finance, released shortly after the crash of 1987, financier George Soros cites the event as an example of “reflexivity.” Soros told us that in stock markets, as in the universe (per Dr. Werner Heisenberg’s uncertainty principle) perceptions influence reality. Soros calls this “alchemy,” referring to the old pseudoscience of the Dark Ages. He wanted to highlight the element of mystery behind markets. One cannot grasp them through science alone, Soros correctly implies.
By contrast, NACD’s choice of Kreps in 1987, as well as many other honored directors over the following 25 years, could be better compared to chemistry than to alchemy, given the significance of chemistry in the boardroom and governance community.
The award received by Kreps has grown to honor more than one category of director. NACD also recognizes a director each year for the B. Kenneth West Lifetime Achievement Award in honor of our late chair Ken West, who had been the CEO of Harris Bank and who at the time oversaw governance research at TIAA-CREF. In 2012, this highest accolade goes to Jack B. Lowe Jr., chairman, Zale Corp. and TDIndustries. The NACD Director of the Year awards, once given to one director per year, have expanded to recognize additional directors. In 2012, there are two recipients: William S. Ayer, chairman, Alaska Air Group and Puget Sound Energy; and Linda Rabbitt, lead director, Towers Watson and chairman/CEO, Rand Construction.
Additionally, the NACD Directorship 100 annually recognizes and honors both corporate directors and governance professionals. The number 100, unlike the 118 chemicals currently in the periodic table, is arbitrary, but the number is fitting, given the importance of “chemistry” in the boardroom and in the governance world. People rarely accomplish things in and of themselves. They interact with other individuals and institutions to create valuable compounds. Nominees for the NACD Directorship 100 and the NACD Director of the Year are evaluated for integrity, mature confidence, informed judgment, and high performance standards for the work of the board.
As I look back on that night, I remember how surprised I was that Kreps had invited her entire family to the event. At the time, I envisioned the successful woman as an Amelia Earhart flying solo. Not so for Kreps. In fact, she had resigned her commerce post early to attend to a crisis involving her husband, Dr. Clifton Kreps, who was despondent over the fact that their careers were forcing them to live apart. Unless my memory is playing tricks with me, Clifton Kreps and their three children were all at her table for the event. Compound chemistry indeed.
In the modern chemistry of the boardroom, we would have said the fundamental elements Kreps brought to her work, as a woman who rose from Kentucky coal town poverty to national leadership, were grit, integrity, and a sharp mind—as witnessed by her peers in the boardrooms. They too were there that night 25 years ago. I recall seeing representatives of some of her boards, which were no less than the teams overseeing corporations that brought us the enduring brands of AT&T, Citi, Chrysler, Deere, Kodak, Penney, Nabisco, and Zurn—as well as the investments of TIAA-CREF.
It’s a search to look beneath the surface of appearance to see the reality of character. That’s what makes the right chemistry in the boardroom and the right decisions for our long-term economic future. Stay tuned for more NACD Director of the Year and NACD Directorship 100 profiles in future blogs.